* Japan FX intervention pushes yen sharply lower, Nikkei up
* Weak U.S. manufacturing data weighs on stocks
* Treasuries up as traders expect BoJ to buy US debt
By Walter Brandimarte
NEW YORK, Sept 15 (Reuters) - The yen tumbled against the
dollar on Wednesday after Japan began heavily selling its
currency in foreign exchange markets, boosting Treasuries
prices, while uncertainty about economic growth kept stocks
flat.
China's yuan jumped against the dollar on Wednesday as U.S.
pressure mounts again over the yuan's value.
Prices of short-dated U.S. Treasuries rose as traders
anticipated the Bank of Japan may soon buy U.S. debt to park
dollars coming in from its first intervention in more than six
years. The intervention and weak U.S. manufacturing data
weighed on world stocks.
Japan promised to keep intervening in the market to protect
its fragile economic recovery. The yen had recently reached its
highest level in 15 years, threatening Japanese exporters.
[]
Traders cited market estimates that Wednesday's efforts
amounted to around 1.5 trillion yen ($17.67 billion).
"I think we're now going to see persistent official buying
of dollar/yen in the near-term," said Adam Cole, head of
currency strategy at RBC Capital Markets.
The yuan <CNY=CFXS> closed up against the dollar on
Wednesday, scoring its fastest rise in five trading days since
February 2008.
The dollar jumped 3.09 percent to a 85.62 yen <JPY=>, after
having dropped to a 15-year low of 82.87 yen earlier, and was
up 0.4 percent against a basket of major currencies <.DXY>.
Still, the dollar remains about 7.8 percent lower this year
against the yen, which is seen by investors as a safe haven
from concerns over global growth.
"Speculators have been long of yen so there is scope for
further yen selling. But there's skepticism over whether the
Japanese can change the trend as fundamentals haven't altered,"
said Beat Siegenthaler, a foreign exchange strategist at UBS.
Japan's intervention also helped send the euro, Australian
dollar and sterling sharply higher on the day against the
Japanese currency, although traders doubted Tokyo had bought
anything other than dollars.
The euro was up 3.2 percent at 111.44 yen <EURJPY=>.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Stories on yen strength, intervention: []
PDF on yen's rise: http://r.reuters.com/zuz33p
Reuters Insider TV-Dlr bounce: http://link.reuters.com/fet63p
Graphic on yen strength: http://r.reuters.com/puw56n
Japan political risk: http://r.reuters.com/jyj83n
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Japan's benchmark Nikkei stock index <> rose 2.3
percent, supported by gains for exporters like Toyota Motor
Corp <7203.T>, which climbed 3.8 percent.
But weak U.S. economic data weighed on world stocks,
keeping the MSCI All-Country World index <.MIWD00000PUS> a
touch lower by 0.1 percent.
U.S. industrial output decelerated in August while a
measure of New York state business conditions slipped to its
lowest level in more than a year, a sign that growth in the
world's largest economy could be slowing.
"A lot of people are aware we're at the upper end of the
range that we've been stuck in for a while, so you have a
combination of having a nice recent run-up and a little bit of
weak economic data," said Eric Kuby, chief investment officer
at North Star Investment Management Corp in Chicago.
"What you're seeing is some traders saying we're going to
take some profits here ... but what you're seeing is a pretty
muted reaction."
The Dow Jones industrial average <> rose 32.20 points,
or 0.31 percent, to 10,558.69, while The Standard & Poor's 500
Index <.SPX> was nearly stable at 1,121.06. The Nasdaq
Composite Index <> edged up 1.98 points, or 0.09 percent,
to 2,291.75.
In Europe, the FTSEurofirst 300 <> of top shares
slipped 0.22 percent, while the MSCI stock index for emerging
markets <.MSCIEF> was 0.11 percent higher.
U.S. Treasuries' prices rose as Japan's intervention
spurred bets that the world's No. 3 economy will reinvest their
dollar purchases back into U.S. government debt.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
1/32 in price, with the yield at 2.6736 percent. The 2-year
note <US2YT=RR> was up 1/32, with the yield at 0.4754 percent.
Oil prices fell 1.6 percent to trade below $76 a barrel,
down for the second day, ahead of the U.S. government's weekly
oil inventory report.
(Additional reporting by Charlotte Cooper in Tokyo, Richard
Leong and Leah Schnurr in New York)
